Financial Development and Economic Growth: Empirical Evidence from Six MENA Countries

This paper examines the causal relationship between financial development and economic growth for six Middle Eastern and North African countries (Algeria, Egypt, Israel, Morocco, Syria, and Tunisia), within a quadvariate vector autoregressive framework. We employ four different measures of financial development and apply the augmented vector autoregression vector (VAR) methodology of Toda and Yamamoto to test for Granger causality. Our empirical results strongly support the hypothesis that finance leads to growth in five out of the six countries. Only in Israel could weak support be found for causality running from economic growth to financial development but no causality in the other direction. These findings suggest the need to accelerate the financial reforms that have been launched since the mid 1980s and to improve the efficiency of these countries’ financial systems to stimulate saving/investment and, consequently, long‐term economic growth.     

Aid, Agriculture and Poverty in Developing Countries

The authors make two contributions to the debate on aid‐effectiveness, illustrating that for impact on poverty what matters is not just the level but also the composition and stability of aid. One specific implication of this for aid policy is that aid most effectively reduces poverty if it supports public (and other) expenditures which are supportive of agricultural development. Regression analysis confirms that these are not only direct expenditure on agriculture, but also on education and infrastructure, and military expenditure has a negative impact. Three factors appear to be particularly conducive to the development of stable pro‐poor expenditure patterns (and in particular pro‐agriculture expenditure patterns). These are expenditure strategies which protect the poor against risk, the development of stable relations between governments and aid donors, and long‐term political commitment to pro‐poor strategies by government. The argument is pursued partly by panel‐data econometric analysis of developing countries as a whole, and partly by case studies of sustained and non‐sustained green revolutions in heavily aid‐dependent countries in Africa.     

Facets of narcissism and leadership: A tale of Dr. Jekyll and Mr. Hyde?

Research on narcissism continues to develop at a rapid pace. Yet, researchers from different disciplines are still divided over whether narcissists are good versus bad leaders. On the one hand, narcissists' bright qualities (e.g., charisma) are associated with positive outcomes at different levels of analysis from subordinates, to peers, and the organization as a whole. On the other hand, however, narcissists' dark qualities (e.g., entitlement) are associated with a number of counterproductive work behaviors, causing organizations to falter. The present article adds to and extends the traditional good-versus-bad debate about narcissistic leadership and pursues three goals: (a) to critically review the literature on narcissistic leaders and their behaviors in the workplace, (b) to provide tangible recommendations for how to best assess, select, and develop narcissistic leaders, and (c) to highlight future directions and ongoing challenges ahead in the field of narcissistic leadership.     

Institutional changes and breakpoints in Israeli trade

This paper examines the structural changes in Israeli trade trends since the 1970s. Structural change tests do not reject the null of no breaks in Israeli trade trends after Israel signed FTA agreements with the EEC and the USA, or after Israel's 1991 new trade policy. The tests, however, show significant evidence for breakpoints in 1993 in Israel's trade shares with three countries who had adhered strongly to the Arab boycott. This result suggests that the Middle East peace process, which began in 1991, considerably weakened the boycott and brought about positive changes in Israeli long-term trade patterns.     

Provision of Step-Level Public Goods with Uncertain Provision Threshold and Continuous Contribution

Common to most theoretical and empirical research on public goods is the assumption that the parameters of the game are common knowledge. Recent theoretical and empirical studies have questioned this assumption by arguing that many public goods situations are characterized by uncertainty regarding various aspects of the situation. In particular, Suleiman (1997) argued that members of production groups of step-level public goods are often uncertain about the value of the provision threshold. For this type of uncertainty he proposed three distinct models to account for the individual's contribution.The present study reports the results of an experiment designed primarily to test and contrast the predictions derived from two of these models – a subjective expected utility model and a cooperative model – regarding the effects of threshold uncertainty on contribution for the provision of step-level public goods. Other goals of the study were to test the joint effect of the threshold uncertainty level, and its mean (low vs. high), on contribution, and to examine the effect of threshold uncertainty on the individuals' estimates regarding the contributions of other group members.The results show that the effect of threshold uncertainty is moderated by the threshold mean: Contribution to the public good increased as a function of uncertainty for the lower threshold mean, and decreased (though not significantly) for the higher threshold mean. In contrast, for the two threshold means the subjects' estimates of the mean and variability of others' contribution increased with threshold uncertainty.The models' comparison revealed that the cooperative model was superior to the subjective expected utility model. This result adds to a substantial body of research on social dilemmas showing that under conditions of social (strategic) uncertainty, group members tacitly coordinate their choice behavior by anchoring their decisions on rules of fairness.     

On the Optimality of a GCC Monetary Union: Structural VAR,Common Trends,and Common Cycles Evidence

The suitability of the proposed monetary union among the members of the Gulf Cooperation Council (GCC) is examined. The authors identify the underlying structural shocks that these economies are subject to and assess the extent to which the shocks are symmetric. Alternatively, the authors test for common trends and common business cycles among the GCC economies. They find that while the transitory demand shocks are typically symmetric, the permanent supply shocks are asymmetric. Furthermore, they do not find synchronous long‐run and short‐run movements in output. Despite the progress that has been made in terms of integration, the findings indicate that the conditions for forming a GCC monetary union have not as yet been met.     

Pricing the Chicago Board of Trade T-Bond futures

The aim of this paper is to investigate the pricing of the Chicago Board of Trade (CBOT) Treasury-Bond futures. The difficulty in pricing it arises from its multiple inter-dependent embedded delivery options, which can be exercised at various times and dates during the delivery month. We consider a general Markov diffusion process model for stochastic interest rates and propose a pricing algorithm that can handle all the delivery rules embedded in the CBOT T-Bond futures. Our procedure combines dynamic programming, finite-elements approximation, and fixed-point evaluation. Numerical illustrations are provided under the one-factor Vasicek and Cox–Ingesoll–Ross models, and under the time in-homogeneous Hull–White model.     

Palestine's International Visitors Barriers: Case Studies of Bethlehem and Ramallah

This study investigated the demographic characteristics, the travel experiences and the intentions to revisit of international tourists to the cities of Bethlehem and Ramallah, which are located in Palestine. The study conducted a survey to collect data from 293 international visitors, 8 years after the second Palestinian uprising called ‘intifada’ began. The results revealed that the majority of the foreign tourists were Europeans who traveled for religious and spiritual purposes. Moreover, most of the tourists were willing to revisit Palestine. This study resulted in a comprehensive understanding of tourism characteristics under the current political circumstances of Palestine, leading to significant implications for tourism policy‐makers. Copyright © 2011 John Wiley & Sons, Ltd.